Texas Lawmaker Moves to Step Up Pension
Oversight

March 11, 2009 (PLANSONSOR.com) - The state board
charged with overseeing public pensions in Texas could get
more funding and authority under a bill filed by state Senate
Finance Committee Chairman Steve Ogden.

The Austin American-Statesman reports that Senate
Bill 1548 would give the board new authority to review a
fund’s investment strategy and financial condition and
set recommended standards for reporting that condition.
The legislation would also establish policies on
conflicts of interest, gifts, and prohibited employment
for the people who serve the systems.

Under the bill, the board and the state attorney
general’s office would be given explicit authority to
investigate potential violations, and the board’s
watchdog authority would be extended to the investment
funds that manage the endowments for Texas public schools
and universities, the American-Statesman said.

Ogden
‘s bill reduces the board size to five members — all of
whom must have experience in investments, pension
administration or law — with three to be appointed by the
governor.

Ogden
said the Texas State Pension Review Board has been a “shell
organization” with little funding or authority to monitor
the nearly 400 state and local pension systems. According
to the news report, former Pension Review Board Chairman
Frederick “Shad” Rowe said the bill is a “big step in the
right direction” to ensure that the state’s funds are
honest and forthcoming about their financial condition. He
added that transparency is even more important now because
the funds will be under pressure to produce unrealistic
returns during the current economic downturn.

However, Paul Brown, president of the Texas
Association of Public Employee Retirement Systems, said
the bill aims to fix a problem that does not exist
because the funds are generally in good shape. “The
current structure of the Pension Review Board is working
very adequately,” Brown said, according to the news
report.